Utah Transit Authority, Federal Corruption, Utah 2017

SALT LAKE CITY - In a shocking move, the Utah U.S. Attorney's Office has agreed to the termination of a federal monitorship agreement with the Utah Transit Authority (UTA) based upon UTA's substantial compliance with the monitorship requirements and a federal non-prosecution agreement entered into by the parties in 2017.

The non-prosecution agreement arose out of a federal investigation into UTA's operation of mass public transit services, application for federal grants and funding, expenditure and use of federal funds, or the negotiation for, and/or acquisition of, real property, equipment and other capital improvements related to UTA operations. The non-prosecution agreement was driven in large part by UTA's acknowledgment and recognition of the need for improved institutional conformity with financial and ethical requirements pertaining to the following four core issues of focus during the investigation:

Inadequate controls over federal funds and drawdowns from federal grants;

Improper handling and disclosure of property acquisition and disposition, including inadequate oversight of transit-oriented development projects;

Non-compliance with ethical standards, resulting in benefits to UTA employees and/or Board members; and

Improper approval of executive bonuses.

A critical component of the non-prosecution agreement involved the retention of a third-party monitor to ensure the continued implementation of institutional improvements and reforms, and to recommend additional improvements and reforms, particularly those intended to address the four core issues. On September 5, 2018, UTA formally retained a team of attorneys from the law firm of Coblentz Patch Duffy & Bass (the “Monitor”) to conduct the UTA federal monitorship, broken down into three phases.

The first phase of the monitorship was an investigatory inquiry involving interviews of UTA employees and a review of UTA records aimed at identifying the institutional problems within UTA that led to the lack of conformity with financial and ethical requirements related to the four core issues identified in the Non-Prosecution Agreement. This phase was completed by UTA in July of 2019.

The second phase of the monitorship was focused on UTA's adoption of critical reforms related to the same four core issues identified in the Non-Prosecution Agreement. Phase two included a review of the implementation and the effectiveness of reforms recommended by UTA and the Monitor. The reforms included:

Clarification of the Local Advisory Council's role and authority over UTA's major capital projects and its interaction with UTA's three-member Board;

New policies and standard operating procedures related to the four core issues;

New and revised conflict of interest policies and procedures, along with ethics training;

Implementing an ethics hotline and a completely anonymous process for whistleblowers to raise concerns about ethics;

Establishing an independent risk management function, an additional layer of checks and balances targeting future risks and the functionality of implemented controls;

New or revised polices concerning ethics and gift parameters for procurement professionals, along with safeguards designed to identify and eliminate malfeasance during the approval process of any transit-oriented developments.

The third phase of the monitorship involved a final report issued by the Monitor. Based upon the review of the Monitor’s interim and final reports, and the U.S. Attorney's Office ongoing review and confirmation of UTA's adherence to key financial and ethical requirements pertaining to the four core issues identified in the non-prosecution agreement, the United States Attorney's Office has notified UTA that the federal monitorship is deemed completed and terminated, effective immediately.

“The successful completion of the Monitorship is the product of effective collaboration between the UTA, the Monitor, and the U.S. Attorney's Office,” said a spokesperson for the UTA.

Defendant/respondent: Utah Transit Authority

Exact criminal charges: Federal corruption

City and state: Salt Lake City, Utah

Exact date: April 2017

Sentence or outcome: Termination of federal monitorship

Source: https://www.justice.gov/usao-ut/pr/us-attorney-s-office-agrees-termination-federal-monitorship-requirement-utah-transit